CIOT: HMRC should review private residence relief

The Chartered Institute of Taxation (CIOT) has called for HMRC to review the use of private residence relief, before making changes that have been proposed for April 2020.

Private residence relief allows people selling their home to do so without incurring a capital gains tax charge.

If a property has qualified for private residence relief at some point during ownership, it almost always qualifies for a ‘final period exemption' of 18 months, to allow for any delays in selling a property.

HMRC recently launched a consultation which proposed to reduce the final period exemption from 18 months to 9 months from April 2020.

It says this is intended to prevent individuals from accruing private residence relief on two properties simultaneously, and to better target the exemption at owner-occupiers.

In response, the CIOT has said HMRC should review the aims and use of the relief before making the change.